In August 2016, a New York State Board agreed to grant a multi-billion dollar subsidy to the state’s nuclear energy sector. This subsidy is to be government mandated through the forcing of utility companies to purchase and pay nuclear power plants in zero-emission credits, thereby subsidizing nuclear plants’ operations. By creating this subsidy, the government is effectively saving three nuclear power plants in Upstate New York from permanent closures; however, at the expense of the tax-payer who will see their utility bills rise. Further concerns arise from various taxpayers and NGOs who note that of the three nuclear plants being saved, two belong to Exelon - leading to claims of government corruption. The state board had warranted such
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These macroeconomic changes, “…[have] hurt the profits of many nuclear plants, prompting plans to shut down some in New York.” As the nuclear energy sector is vital for New York State’s clean-energy initiative, and the shutting of nuclear power plants could lead utility companies to switch to carbon-emitting gas companies, the Board realized that they must intervene in the energy market. Such usage of interventionist “counter-cyclical fiscal policy” to maintain growth is explained by Aghion and Cage: “Macroeconomic volatility tends to be detrimental to innovation and growth… growth-enhancing investments need to be maintained over the long-run.” By intervening in the depleted nuclear energy market, the government understands its responsibility to maintain macroeconomic stabilization in hard economic times. Such government stimulus will be used to foster cleaner innovation in the energy sector, as well as preventing the losses of jobs of factory …show more content…
However, in actuality, only a couple of energy companies will benefit from these subsidies, as two thirds of Upstate New York’s nuclear plants are owned by a single company. Due to this consequence, and the fact that taxpayers will see their bills increase to cover the energy plan, a contingency of elected officials and NGOs voiced their displeasure in a letter to state officials stating: “It is not the role of the public to bail out and pay a corporation to maintain a failing business for their private profit” . One might ask why these citizens protest the subsidies, despite the implied investment in economic and environmental growth they create? The answer to this question has to do with the citizen’s perception of the state’s role in the social contract to reduce deficits by increasing taxes, and fairly redistributing these tax-dollars to appropriate parties, as discussed by Aghion and Cage. According to these authors, “Deficit reduction will be costly to everybody… [and] the effort will have to be shared equally – which supposes a fair tax increase … Moreover, the citizens will be more willing to accept [these] tax increases if they know the government will use fiscal resources efficiently and is not corrupt .” The officials and NGO’s that signed the letter to state officials do not accept the tax increase on the
These macroeconomic changes, “…[have] hurt the profits of many nuclear plants, prompting plans to shut down some in New York.” As the nuclear energy sector is vital for New York State’s clean-energy initiative, and the shutting of nuclear power plants could lead utility companies to switch to carbon-emitting gas companies, the Board realized that they must intervene in the energy market. Such usage of interventionist “counter-cyclical fiscal policy” to maintain growth is explained by Aghion and Cage: “Macroeconomic volatility tends to be detrimental to innovation and growth… growth-enhancing investments need to be maintained over the long-run.” By intervening in the depleted nuclear energy market, the government understands its responsibility to maintain macroeconomic stabilization in hard economic times. Such government stimulus will be used to foster cleaner innovation in the energy sector, as well as preventing the losses of jobs of factory …show more content…
However, in actuality, only a couple of energy companies will benefit from these subsidies, as two thirds of Upstate New York’s nuclear plants are owned by a single company. Due to this consequence, and the fact that taxpayers will see their bills increase to cover the energy plan, a contingency of elected officials and NGOs voiced their displeasure in a letter to state officials stating: “It is not the role of the public to bail out and pay a corporation to maintain a failing business for their private profit” . One might ask why these citizens protest the subsidies, despite the implied investment in economic and environmental growth they create? The answer to this question has to do with the citizen’s perception of the state’s role in the social contract to reduce deficits by increasing taxes, and fairly redistributing these tax-dollars to appropriate parties, as discussed by Aghion and Cage. According to these authors, “Deficit reduction will be costly to everybody… [and] the effort will have to be shared equally – which supposes a fair tax increase … Moreover, the citizens will be more willing to accept [these] tax increases if they know the government will use fiscal resources efficiently and is not corrupt .” The officials and NGO’s that signed the letter to state officials do not accept the tax increase on the